9911796707
TMI Blog2005 (7) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial Products Pvt. Ltd. (hereinafter referred to as 'DIPPL' for short) for the manufacture of 'Grooved Rubber Sole Plates and molded pads' meant for Indian Railways. After manufacture of the said products, DEPL used to sent the same to DIPPL. After further processing, DIPPL to clear the goods on payment of duty. DEPL took Modvat credit on the raw material received. Further they received Rs. 3.50 per pad as job charges. But while clearing the goods they paid duty only on the value which is equal to the Modvat credit taken on the input raw materials. In other words, they have not adopted the correct value as per Rule 6(b)(ii)) of the Central Excise (Valuation) Rules, 1975. The Revenue proceeded against the appellants and in the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was carried out, no objection was raised. (v) Only on 14-10-99, the Department raised the issue. The appellants furnished a reply dated 18-1-2000. The Department had acknowledged the receipt of the letter on 19-1-2000. For 9 months the department did not take any action. On 25-10-2000, the department wanted cost data for certain models. In view of the damage due to flood in August 2000, most of the documents were lost and damaged. Hence, the appellants was not in a position to submit cost data for certain models. However in respect of the models which constituting 99.62% of the total job work done by the appellants, cost data has already been submitted and the same has been acknowledged by the Department. (vi) Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever in the present case, they have followed the procedure of taking Modvat credit on the inputs and paying duty only on the value equal to the Modvat credit portion. No doubt, this does not represent the correct value as per Section 4 of the Central Excise Act. When excisable goods are cleared, the value adopted should be in accordance with the Central Excise law. Each assessee cannot adopt a procedure according to his will ignoring the Central Excise law. But in the present case, the appellants have made clear their intention of paying duty only on the value representing the Modvat credit taken. The Department has received the agreement entered by the appellants with the principal manufacturer DIPPL. In view of this fact, we cannot hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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